In your June 2019 issue . . .
MARKETS HAVE SHOWN PROMISE for the second half of the year with June to December Class III futures trading near $16.70 per cwt. and Class IV CME contracts averaging $17.20 during the same time span.
WITH A PROJECTED $18.05 ALL-MILK PRICE, USDA economists also have painted a more favorable picture for 2019 milk prices in their World Agricultural Supply and Demand Estimates. That projection has climbed $1.25 per cwt. since December. The 2020 opening forecast $18.80.
FOR THE FIRST TIME IN 26 YEARS, cheese inventories contracted from March to April. While the 0.3 percent reduction was small, the change in direction caused spot barrels to hit a new market high for the year.
TARIFFS AGAINST U.S. CHEESE were lifted by Mexico in late May. That also signaled that the new U.S.-Mexico-Canada Agreement (USMCA), designed to replace NAFTA, could be closer to completion.
BY PURCHASING $1.4 BILLION IN PRODUCTS last year, Mexico was America’s largest dairy customer. As this took place, Canada, the second-largest dairy customer, lifted retaliatory tariffs against U.S. yogurt.
MORE WORK LIES AHEAD ON EXPORTS. China doubled down on tariffs on U.S. dairy lactose and infant formula. The U.S. also must advance trade negotiations with the world’s largest cheese importer — Japan.
HOWEVER, JAPAN ELIMINATED LONG-STANDING restrictions on U.S. beef, paving the way for expanded sales into the world’s top global beef market. The new terms, which take place immediately, allow U.S. products from all cattle to enter Japan for the first time since 2003.
A HEARING ON PROPOSED TARIFFS on EU cheese was conducted by the Office of the U.S. Trade Representative. The countermeasure by the U.S. could remain in place until the EU removes subsidies on Airbus. At the moment, the U.S. had a $1.6 billion dairy trade deficient with the EU.
DAIRY PRODUCT PRICES SLID on New Zealand’s Global Dairy Trade for the first time since December. Overall, prices fell 1.2 percent, while Cheddar climbed 15.2 percent, albeit a small number of transactions.
APRIL MILK PRODUCTION CLIMBED 0.1 PERCENT across the United States. Among the major milk states: California rose 2.6 percent; Wisconsin climbed 0.4 percent; Idaho was up 2.2 percent; New York expanded 1.9 percent; and Texas jumped 6.7 percent, leading all gainers.
SIGN-UP BEGINS JUNE 17 for the Dairy Margin Coverage (DMC) program and runs through September 20. To participate in the farm bill’s signature dairy program, go to your local Farm Service Agency (FSA) office. For more insight on the DMC program, see page 345.
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